Fox Interactive seeks original content

Plus: Microsoft wins restraining order against Google

BambiFrancisco

SAN FRANCISCO (MarketWatch) - As News Corp.'s Lachlan Murdoch shakes up the executive suites, there is some stability and shape taking place at the media conglomerate's Internet division.

News Corp. tapped Ross Levinsohn, former head of Fox Sports, to be the president of the newly-created Fox Interactive Media unit. As Levinsohn sees it, his first line of duty is to bring cohesiveness to what he sees as "disparate" divisions across the Fox family.

Under his leadership, Levinsohn said Fox Interactive Media will be a joint venture with all the offline divisions, including Fox News Channel and Fox Broadcasting.

Levinsohn is also seeking to fill in more content within each division -- which will be entertainment, sports and news. To do that, Levinsohn will need to go beyond the content that's provided top down.

"We'll do strategic acquisitions of companies and rights," said Levinsohn.

Currently, most of what is online at Fox is produced by the Fox properties. About 10% to 15% of what's online is original content, such as five-minute sports updates, and original interviews in sports and entertainment, said Levinsohn. That should change over time, he suggested.

As for the content rights, Levinsohn wants to get rights to sports programming. While Fox Sports has NCAA Football rights, those rights to air the content don't extend to the Internet, he said. "We don't have official league rights... The leagues have always kept those separate."

Levinsohn wouldn't give much color on the kind of content acquisitions Fox Interactive is looking for, but suffice it to say that Levinsohn already has his hands full with News Corp's recent $580 million cash acquisition of Intermix
MIX, +0.18%
the majority owner of MySpace.

"I look at MySpace as a lifestyle portal," said Levinsohn, who said that News Corp. began serious talks with MySpace executives in late June, early July.

While Levinsohn plans to leave the executives at MySpace alone to continue creating the home-grown, user-generated content that's made MySpace popular, Levinsohn has some ideas.

"We can turn on professional versions of MySpace, given our holdings in the U.K. with BSkyB and a bunch of newspapers," said Levinsohn. In the U.K., MySpace already has 700,000 members, he said.

Asked how Fox Interactive will compete against other budding Internet media empires, like Yahoo
YHOO
Levinsohn said he's been "waiting to see where Yahoo's heading." But he also said that Fox met with the head of Yahoo's media division, former ABC executive Lloyd Braun, and his team. "He came in to pitch us and he told us that they're not planning to be competitive with News Corp."

Levinsohn has the benefit of hindsight as News Corp had tried to build out an Internet division in the past. "The biggest difference between then and today was that the Internet division was a stand-alone business that wasn't interacting with the other divisions... Everything ran in a silo," he said. News Corp's prior effort to build a media site was shut down in 1999, said Levinsohn.

Google and Microsoft talent wars

Microsoft
MSFT, -1.81%
won a temporary restraining order against Google
GOOG, -3.16%
The order bars a former Microsoft employee - Kai-Fu Lee -- from conducting duties at Google that are similar to the duties performed at Microsoft.

Here's what Google had to say.

"While we don't believe a TRO is necessary, we're gratified that the judge recognized that all Google and Dr. Lee have to do is avoid having Dr. Lee do anything competitive with what he did at Microsoft," said Nicole Wong, associate general counsel at Google.

"As we have said all along, we have no intention of having him do that. The judge also ordered Microsoft to be more specific in identifying the matters that Dr. Lee worked on at Microsoft that they claim are competitive with what he will do at Google. We will be looking for clarification when Microsoft complies with the judge's order.

"The TRO is only a temporary measure to maintain the status quo and to give the court more time to fully consider the parties' positions. We are confident that once the judge has done so he will side with Google and Dr. Lee. Microsoft will not prevail in their intimidation campaign."

Microsoft was not immediately available to comment.

The ones setting the standard

EBay rose 1.5% to $42.50 in Friday trading. The stock had soared 17% last week on the strength of second-quarter results. Total sales grew by 40%, led by acceleration in eBay's U.S. business and payment service. See full story.

Yahoo fell slightly to $33.80. The stock had fallen back last week on concerns that the company's search business was not growing as quickly as some had hoped. Investors are also concerned that Yahoo's push into the media business will face challenges as older-line media players wake up to the Internet opportunity. See full story.

Google slipped slightly to $290. The search giant also reported its second-quarter results last week. See full story.

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